Ponsse also update us on how the war in Ukraine affects machine manufactures.
Demand for Ponsse forest machines and services remained healthy. Global market conditions were generally good, supported by a good market situation in the pulp industry and the absence of Russian timber and sawn timber in the European market. The corporate acquisition of their Russian subsidiary OOO Ponsse is awaiting approval by Russian authorities, and they are aiming to conclude the sale as soon as possible.
The discontinuation of business in Russia, heavy inflation, and the notable decline in the availability of parts and components continue to have a material effect on Ponsse. The problems with the availability of parts and components continued during the period under review, impacting both the company’s profitability and cash flow. The company’s production and aftersales services continue to suffer due to limited availability. Regardless, their production has continued without interruption.
During the period under review, Ponsse launched major product and service solutions, which were presented at forest machinery fairs around the world. In addition to conventional harvesting technology, they launched completely new technology with their subsidiary Epec: the electrically driven Ponsse EV1 forest machine concept. The interest of developing forestry towards Ponsse’s and Epec’s new products has been highly encouraging. They continue to target pioneering product technology with their investments.
Net sales were regionally distributed as follows: Northern Europe 37.7 (40.3) per cent, Central and Southern Europe 22.0 (23.1) per cent, North and South America 36.1 (31.8) per cent and other countries 4.2 (4.8) per cent
Ponsse’s operating environment has changed drastically and it is affecting Ponsse’s operations. Russia’s invasion of Ukraine has forced the European Union and United States to respond and impose rigid sanctions against Russia. In compliance with export sanctions and the company’s policy, Ponsse suspended all sales and export operations to Russia and Belarus effective 2 March 2022. At the same time, the operations of the local Russian subsidiary OOO Ponsse were discontinued.
The war in Ukraine is hampering to a great extent the operation of the manufacturing networks. Russia, Belarus and Ukraine have played a significant role in the supply chains of the European steel industry, while Russia has played a critical role as an energy supplier to Europe. As a result of the war, the availability of raw materials used in steel production has declined significantly and rising energy prices have pushed up the costs of steel processing to the extreme. In addition, Ukraine has supplied, inter alia, gases used in the semiconductor manufacturing process, which has already been reflected in the shortage of semiconductors. The delivery capacity of the manufacturing networks has decreased and inflation has significantly risen as a result of the crisis.
In the challenging situation, Ponsse’s strong financial position is important. The company’s financial position has remained strong due to good liquidity and binding credit limit facilities agreed with financial institutions. In terms of financing, Ponsse has carried out all measures necessary to ensure business continuity and financial situation is regularly evaluated. Source